2019 (4) TMI 2086 - HC - Benami Property

Prohibition of Benami Property Transactions - powers exercised by the Adjudicating Authority which has limited jurisdiction either to adjudicate property benami - order passed by the learned Single Judge staying order of Adjudicating Authority passed under Section 26(3) of the Act 1988 - As submitted that Ld. Single Judge overlooked nature of directions given by Adjudicating Authority and irrespective of the fact that whether respondent is benamidar or beneficial order after giving opportunity of hearing upon issuance of show cause of notice and order was passed and therefore it is not violative of principles of natural justice. HELD THAT - As challenging to the order passed by learned Single Judge in exercise of extraordinary jurisdiction under Article 226 and 227 of the Constitution of India we are of the view that all contentions including that of powers conferred upon Adjudicating Authority under Section 26(1) (3) and whether such powers conferred upon Adjudicating Authority vis-a-vis jurisdiction all can be raised before Appellate Tribunal exercising vide appellate powers under Section 46 of the Act 1988. Even after the order is passed by the Appellate Tribunal further appeal is provided before the High Court under Section 49 of the Act 1988 we are of the considered opinion in view of decision of the Apex Court in the case of Thansingh Nathmal Ors. 1964 (2) TMI 79 - SUPREME COURT that High Court is not to interfere with the order passed by the Adjudicating or Competent Authority when inbuilt efficacious alternative remedies are available we find that oral order passed by learned Single Judge is accordingly deserves to be stayed till further order till final disposal of the petition.

Summary

Issues Involved:
1. Invocation of extraordinary jurisdiction under Article 226 of the Constitution of India.
2. Jurisdiction and powers of the Adjudicating Authority under the Prohibition of Benami Property Transactions Act, 1988.
3. Compliance with principles of natural justice.
4. Availability of alternative remedies under Sections 46 and 49 of the Prohibition of Benami Property Transactions Act, 1988.

Issue-wise Detailed Analysis:

1. Invocation of Extraordinary Jurisdiction under Article 226 of the Constitution of India:
The judgment discusses the frequent invocation of the High Court's extraordinary jurisdiction under Article 226 to thwart proceedings initiated under the Prohibition of Benami Property Transactions Act, 1988. The appellants argued that the learned Single Judge's order staying the Adjudicating Authority's order was inappropriate given the inbuilt alternative remedies provided by the Act. The court emphasized that the High Court should not interfere when efficacious alternative remedies are available, as upheld by the Supreme Court in Thansingh Nathmal & Ors. vs. A. Mazid.

2. Jurisdiction and Powers of the Adjudicating Authority:
The Adjudicating Authority's jurisdiction under Section 26(3) of the Act was a significant point of contention. The appellants argued that the Adjudicating Authority acted within its jurisdiction by confirming the provisional attachment order and directing further inquiries. However, the respondents contended that the Adjudicating Authority exceeded its jurisdiction by issuing directions for further inquiries, which is not explicitly provided for under the Act. The court noted that such contentions could be addressed before the Appellate Tribunal.

3. Compliance with Principles of Natural Justice:
The respondents argued that the Adjudicating Authority's order violated principles of natural justice, as it was passed without proper hearing and notice. The court observed that notices were issued, and hearings were conducted before the final order was passed. Therefore, the contention of violation of natural justice was not substantiated. The court also noted that the respondents could raise these issues before the Appellate Tribunal.

4. Availability of Alternative Remedies:
The judgment highlighted the alternative remedies available under Sections 46 and 49 of the Act, which provide for appeals to the Appellate Tribunal and the High Court, respectively. The court emphasized that these remedies should be exhausted before invoking the High Court's extraordinary jurisdiction. The court stayed the learned Single Judge's order, noting that all contentions regarding the Adjudicating Authority's powers and jurisdiction could be raised before the Appellate Tribunal.

Conclusion:
The court concluded that the learned Single Judge's order staying the Adjudicating Authority's order was inappropriate given the availability of alternative remedies under the Act. The court stayed the order of the learned Single Judge and disposed of the civil applications for stay. The court also rejected the respondents' request to continue the relief to enable them to approach the Supreme Court.